QUALCOMM recently reported strong financial results for its second quarter, with revenue up to $10,979 million and net income rising to $2,812 million year-over-year. These positive outcomes, coupled with the company's ongoing share buyback program, reflect a solid performance. However, the company's revenue outlook appeared light, perhaps countering the 5.7% price increase observed over the last week against a backdrop of generally positive market conditions, with the Nasdaq up by 2.7%. While the broader market benefitted from strong earnings, QUALCOMM's forecast might have mitigated its gains.

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QUALCOMM's recent earnings report highlights robust financial performance with US$10.98 billion in revenue and US$2.81 billion in net income, supporting its share buyback initiative. Despite a 5.7% increase in share price, tempered revenue forecasts may offset this momentum. Over the past five years, the company's total return, including dividends, amounted to 109.76%. This puts QUALCOMM's share price on a solid growth trajectory, but its return over the past year underperformed the US Semiconductor industry, which saw a 12.8% increase, and also fell short of the broader US market's 9.6% return.

The current analyst consensus reflects a price target of US$187.16, suggesting a higher valuation than the present share price of US$146.88. The potential for further growth is supported by QUALCOMM's diversification in the automotive and IoT sectors, alongside its ongoing innovations in AI and Snapdragon products. However, geopolitical risks and reliance on partnerships might affect revenue and earnings forecasts. The ongoing developments promise to reshape QUALCOMM's financial outlook, factoring in the projected growth in non-handset markets, with analysts estimating revenue of US$45.6 billion by 2028. In conjunction, the outlook of earnings achieving US$12.2 billion will hinge on maintaining or expanding its market share while navigating potential barriers. These forecasts align with the necessary PE ratio growth that analysts envision to justify the current price target, marking a 21.5% expected upside from the current price.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:QCOM.

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